George Zornick | The Nation

George Zornick

George Zornick

Action and dysfunction in the Beltway swamp. E-mail tips to george@thenation.com

Obama Faces Political Risks by Staying Soft on Wall Street

New polling out this week shows that beyond the moral and economic imperatives to holding Wall Street accountable, there are significant political imperatives for President Obama as well.

In five critical states—Nevada, Arizona, North Carolina, Pennsylvania and Florida—a majority of independent voters say the administration is not doing enough to police Wall Street banks in the housing market. Strong majorities of independent voters in each state agree that the economic crisis was caused in part by criminal actions on Wall Street. It’s important to reiterate these are independent voters in purple states.

Here are some highlights from the polling, which was released by the Campaign for a Fair Settlement and conducted by Public Policy Polling:

  • In the five states polled on the statement “President Obama has not done enough to hold the banks accountable for their role in the housing collapse,” a stunning 69 percent of independent voters in Nevada agree. Obama gets agreement from at or above 60 percent of independents in each state except Florida, where 59 percent agree.

  • Only 25 percent of Nevada independents disagree with that statement, and the highest number that disagrees is 33 percent, in Florida.

  • In each state, over 70 percent of voters agree that “the economic crisis we’re in is at least partially the result of criminal actions by Wall Street executives,” with the exception of Florida, where 69 percent agree. In Nevada, 77 percent of independents agree with that statement.

  • Obama never gets higher than 41 percent approval for his handling of the housing and mortgage crisis (North Carolina). It’s as low as 30 percent in Arizona.

  • 54 percent of independents in both Nevada and Arizona disapprove of Obama’s handling of the crisis, and he’s at 50 percent in Florida.

The poll does not ask specifically about the Residential Mortgage-Backed Securities working group, the investigation into Wall Street criminality leading up to the housing crash. So it’s impossible to know if voters haven’t heard of it or are unsatisfied with the progress—though really, there’s not much of a difference. If the working group doesn’t do anything, which so far it hasn’t, people aren’t likely to know about it.

Ari Berman argued persuasively this week that Obama should follow Elizabeth Warren’s example and make Wall Street accountability a centerpiece of his campaign. It’s a political winner, and I strongly suspect the Obama team knows this but is more concerned with losing financial industry donations. Berman argues this could be replaced with money from small donors energized over the get-tough approach, which may be true.

But the administration’s reluctance may go deeper than simply counting dollars and votes. A hard truth is that there may be many people inside the White House who are just philosophically opposed to going after the financial industry, and who, if they didn’t work in it themselves, have many friends and political allies there.

If that’s not the case, it’s clear that broad swaths of voters would, and do, believe it—and the onus is on the White House to convince them otherwise.

Will John McCain Save Campaign Finance Reform?

The Hill published an intriguing scoop this morning—one that suggests campaign finance reform, all but left for dead in the 112th Congress, may suddenly have new life.

Senator John McCain is reportedly huddling with Democrats on the DISCLOSE Act, a major piece of campaign finance legislation that would require outside groups that spend more than $10,000 on electioneering to file a disclosure report with the Federal Elections Commission within twenty-four hours. The reports would have to detail the expenditures and also disclose any donors over $10,000.

The legislation, sponsored by Democratic Senator Sheldon Whitehouse, has forty-three Democratic co-sponsors in the Senate—but no Republicans have yet said they would support the bill, which would make it impossible to clear a GOP filibuster. McCain’s support would be monumental, since it could provide cover for several Republican moderates to support the legislation. “That would change everything,” one Democratic aide told The Hill. “That would breathe new life into it.”

There are several caveats here, however. It’s legitimate to wonder how serious McCain actually is. When the DISCLOSE Act passed the House in 2010 and arrived in the Senate, it failed to clear a filibuster by one vote—and McCain was among the Senators voting against ending debate. He publically attacked it as a “bailout to unions,” and his vociferous opposition was significant, since he co-sponsored the last serious Congressional attempt to improve campaign finance, the McCain-Feingold bill of 2003.

Sarah Dufendach, vice president for legislative affairs at Common Cause, sounded skeptical in an interview with The Hill, saying McCain “hasn’t shown any indication that he wants to be involved in this stuff anymore.”

McCain still believes the bill is too friendly to labor unions and signaled that his support is conditional on the bill's being “balanced and address[ing] the issue of union contributions as well as other outside contributions.”

Campaign finance reformers say that’s already the case. “The major argument made in the last Congress, and now being made again by the Chamber of Commerce and its allies, is that this bill is unfairly tilted to labor and against business,” Fred Wertheimer of Democracy 21 told me. “We strongly disagree with that.” (Democracy 21 joined thirty-seven other organizations this week, calling on the Senate to pass the DISCLOSE Act). 

A cynic’s view is that McCain is either trying to water down legislation he feels is inevitable anyhow or is not actually serious about getting the bill passed and is simply interested in floating the story, thus burnishing his maverick credentials with the media and redeeming some lost credibility on campaign finance issues. 

But his now-public support is still very notable, and if he does actually want to make campaign finance more transparent—and if his office actually does start negotiating language of the bill with Democrats—we might see serious campaign finance legislation much earlier than anyone expected.  

New Mexico Congressional Candidate: Jail the Bankers

A candidate for Congress in New Mexico has an interesting new television ad out—one that, for the first time this cycle (as far as I’m aware) explicitly calls for criminal charges for Wall Street executives.

Eric Griego, currently a state senator, is competing in the Democratic primary for the 1st Congressional district in New Mexico against former Albuquerque Mayor Marty Chavez and Michelle Lujan Grisham, a county commissioner. His ad, released today, features an angry Albuquerque couple who lost money in the financial collapse—and then Griego appears. “Wall Street has gotten away scot-free, and Congress has done nothing to hold them accountable,” he says. “I won’t stop until Wall Street bankers who broke the law go to jail.” Watch it:

Griego was the first candidate endorsed by the Progressive Change Campaign Committee this year, and Democracy for America has named him one of its top ten progressive House candidates. Griego is also part of a push to have fellow Democratic state legislators across the country drop any affiliation with ALEC.

Realistically, there’s little that a first-term Congressman could do to force criminal accountability for Wall Street bankers that helped cause the crash. Many of the members of the Congressional Progressive Caucus already want to see jail sentences, as displayed during its meeting with New York Attorney General Eric Schneiderman last month.

But of course there’s strength in numbers, and the more candidates that come to Congress with a demand for Wall Street accountability, the stronger the prospects ultimately get. In Massachusetts, Elizabeth Warren is making that key to her campaign pitch, and it will be interesting to see if other progressive candidates take up this mantle as well.

The Chamber’s Dishonest Ad Campaign Is Underway

The US Chamber of Commerce has promised to mount “the most significant political effort in its 100-year history” to influence this fall’s Congressional races—and, not surprisingly, it’s looking to be a daring exercise in dishonesty as well.

The Chamber rolled out a national television ad last week hitting Democrats who voted for healthcare reform, and now Senator Bill Nelson, who is facing a tough re-election campaign in Florida, is marshaling his lawyers to have the ad pulled from the air waves because of dishonest claims.

The spot contains a particularly explosive charge, particularly in Florida—and one that Republicans have often repeated: “Seniors will see $500 billion in Medicare cuts to fund Obamacare.” See the ad here, as tailored for Nelson:


Nelson’s legal team is warning Florida television stations not to run the ad because the claim about Medicare cuts is literally untrue—the program is still going to get bigger every year; the $500 billion is just a reduction in expected growth. But it’s fundamentally even more dishonest than confusing cuts and reductions in growth.

The clear implication of the ad is that “Obamacare” will reduce Medicare services for seniors. The truth is that spending on Medicare is actually increased under the bill in several key areas: it will, for example, increase spending on preventive services and close the so-called “donut hole” of Medicare Part D prescription drug coverage.

The bill aims to slow the growth of Medicare by increasing premiums to wealthy seniors, reducing payments to the semi-privatized Medicare Advantage program, establishing a review panel to oversee reimbursement rates and slowly decreasing payment rates to healthcare providers.

One might make the case that these measures harm seniors to a greater degree than increasing preventive care and prescription payments—I’m not sure that’s convincing, but it would at least be honest, so long as the growth reductions weren’t presented as cuts. But the Chamber ad does neither, and Nelson’s team is begging local television stations to be the arbiter of these claims—something it claims is all the more important in the post–Citizens United era. From the campaign’s news release:

In the wake of the recent Citizens United case, in which the Supreme Court allowed unlimited and undisclosed corporate money to be spent on such ads, TV stations have a greater responsibility to protect the public from the spread of false and deceptive information, Kendall Coffey, a lawyer for Nelson wrote in a letter to the stations today.

“On behalf of our client, we respectfully insist that you take this inaccurate ad off the air immediately,” Coffey wrote. “As a media outlet, this station has a duty to protect the public from the spread of false information and deliberate deception.”


The ad—which will inevitably be reproduced by journalists covering this dispute (ahem)—may end up bamboozling some Florida seniors, but it also telegraphs the defensive and ultimately weak position of Republicans.

It’s the GOP, of course, which twice passed Paul Ryan’s budget out of the House of Representatives, which ends Medicare as we have always known it. At least two of Nelson’s potential opponents voted for or support that budget. The Chamber might get by for a bit by muddying the waters, but if the heart of the current attack campaign is to essentially criticize the Republican philosophy on Medicare but pretend it’s one held by Democrats, that's not strong political ground to stand on.

Grijalva Calls Out Brewer for Misusing Mortgage Settlement Funds

When the federal government and forty-nine states reached a settlement on mortgage fraud earlier this year, $3.5 billion was earmarked as state aid, which was to be provided to homeowners to help them avoid foreclosure and retain legal counsel—and which the state was supposed to use to prosecute additional mortgage fraud. 

This is important money for many reasons—one being that while the settlement gave the banks immunity from federal and state action, it offered no such immunity for individual cases, and these funds can be crucial in helping aggrieved homeowners battle wealthy bank lawyers.

But several states are re-appropriating that money for other causes. In Arizona, Governor Jan Brewer, a Republican, and the conservative state legislature recently announced a plan to take $50 million of the state’s $97.8 million cut of the settlement and use it to plug holes elsewhere in the budget—created, in part, by large corporate tax cuts.

Though Arizona had the highest foreclosure rate of any state in March—and even though half of the state’s homeowners are underwater—State Senate President Steve Pierce recently said the money’s intended uses are a “low priority” for the state.

Representative Raul Grijalva of Arizona, a co-chair of the Congressional Progressive Caucus, blasted the re-appropriation yesterday as “the best way to make sure homeowners never see the justice they were promised.” He’s trying to get people in the state to pay attention to what’s happening and pressure their legislators.

“Working families were given the short end of the stick, and now Governor Brewer and the Legislature won’t even let them have that,” Grijalva said. “This decision takes away the one chance Arizonans had to get some help navigating the banking bureaucracy that greased the skids on millions of foreclosures. It’s a clear statement of principles, that’s for sure.” 

A Congressional Push to End All Fossil Fuel Subsidies

Senator Bernie Sanders of Vermont speaks outside the US Capitol on May 10 to promote legislation to end taxpayer support of dirty energy industries. Photo by George Zornick.

Over the next ten years, the oil, gas and coal industries are slated to receive $113 billion in taxpayer subsidies—that’s six times the rate at which clean energy initiatives are subsidized. Americans will fund everything from development research for the industry to loan guarantees. There are all kinds of absurd tax breaks—for example, since 1951 the coal industry has been allowed to treat income from coal mines as capital gains, which is now taxed at a 15 percent maximum, instead of as regular income like most other businesses in the country.

Democrats have often presented bills to end a various portions of these subsidies, but a new bicameral bill—introduced by Bernie Sanders in the Senate and Keith Ellison in the House—would wipe out every last subsidy and tax break the industry receives.

“In these difficult economic times, it is imperative that we support the taxpayers of this country, the working people of this country, and not the fossil fuel industry—one of the most powerful and profitable industries in the world,” said Sanders at a rally Thursday morning outside the Capitol building.

Bill McKibben, leader of 350.org, a key player in the White House protests that helped stop the Keystone XL pipeline, appeared with Sanders and Ellison at the rally and explained that the push was about more than halting the waste of taxpayer dollars.

“One of the most important things we can do to grapple with our energy and our climate problems is to end the craziness of sending taxpayer money off to the richest industries on earth,” he said. “It’s an industry whose carbon is doing deep damage around the planet. We need to stop paying them a performance bonus for the environmental damage that they’re creating.”

The Sanders-Ellison legislation combs the federal register and tax code for fossil fuel industry subsidies, tax breaks, special financing and the like and scraps each one. Among them:

  • $12 billion in savings from repealing a 2004 law that allows fossil fuel companies to take manufacturing deductions.

  • $6.8 billion in savings by closing a loophole that allows companies like BP to deduct the expenses of cleaning up their own spills and environmental hazards

  • $2.4 billion in savings by stopping fossil fuel companies from investing through Master Limited Partnerships, which is an avenue not available to clean energy companies

  • $14 billion in savings by eliminating the intangible drilling deduction, which provides capital to fossil fuel companies for drilling projects

Polls show an overwhelming majority of Americans favor junking these subsidies, but of course it’s not that simple. The fossil fuel industry is extremely powerful in Washington and is on track to give the current Congress more money than ever before.

Several speakers at the rally presented spoke not only of legislative action, but activism as well. “The American people have yet to fully muster our great and awesome power,” said Ellison, who has a petition on his website to end polluter welfare. “But when we do, we will wipe these subsidies right out of the box.” 

Seven Democrats Who Are Now Under Pressure to Support Gay Marriage

More than a few high-profile Democrats have been walking the same line on gay marriage that President Obama walked until today: dutifully supporting the repeal of discriminatory measures like the military’s Don’t Ask, Don’t Tell Policy, and in many cases even supporting civil unions—but stopping short of an outright endorsement of marriage equality.

But these Democrats are marching without a leader, now that the president has announced a change of heart. As Richard Kim points out, since Obama stressed that he thinks states should decide the gay marriage issue, this is a step shy of endorsing full marriage equality—but it still suddenly places Obama to the left of many high-profile Democrats, many of whom are up for re-election this fall.

Twenty-two Democratic Senators support gay rights and are explicitly pushing for that plank to be added to the Democratic Party platform this summer, something that seems all the more likely now. But here’s a quick look at some others who are probably huddled with advisers as we speak, trying to figure out if they, too, should “evolve.”

Senate Majority Leader Harry Reid, D-Nevada

This is a big one. Re-elected in 2010 to what many believe could be his last term in the Senate, Reid has been a good advocate for LGBT Americans on many issues—under his leadership the Senate repealed “don’t ask, don’t tell” (DADT) and rejected Republican attempts to strip LGBT protections from the Violence Against Women Act. He’s also repeatedly voted against constitutional amendments that would define marriage as between a man and a woman.

But Reid is a member of the Mormon church, and has stated that he agrees, personally, with the church position that marriage is between and man and a woman only. With Obama, Biden and Nancy Pelosi all in favor of gay marriage, Reid stands as the highest-ranking Democratic official not to support it. 

UPDATE: Reid put out a statement reiterating his personal belief that marriage is between a man in a woman, but also endorsing Americans' ability to enter into same-sex marriage, and adding that individual states should decide. The statement in full: "My personal belief is that marriage is between a man and a woman. But in a civil society, I believe that people should be able to marry whomever they want, and it’s no business of mine if two men or two women want to get married. The idea that allowing two loving, committed people to marry would have any impact on my life, or on my family’s life, always struck me as absurd. In talking with my children and grandchildren, it has become clear to me they take marriage equality as a given. I have no doubt that their view will carry the future. I handled a fair amount of domestic relations work when I was a practicing lawyer, and it was all governed by state law. I believe that is the proper place for this issue to be decided as well.”

Senator Bob Casey, D-Pennsylvania

The first-term Senator voted to repeal DADT and supports civil unions. But this week, after Joe Biden’s appearance on Meet the Press but before Obama’s announcement, a Casey spokesman told the Lehigh Morning Call that Casey remains opposed to gay marriage. (He’s also pro-life, for the record).

Casey is up for re-election in the crucial swing state of Pennsylvania, which went for Obama in 2008 and where the president is currently polling ahead of Romney. His opponent, Republican Tom Smith, is opposed to both gay marriage and civil unions—but like Obama, would leave that decision up to the states.

Senator Claire McCaskill, D-Missouri

McCaskill is also up for re-election in a very tough swing state that went (narrowly) for John McCain in 2008. She, too, voted to repeal DADT and also opposes a constitutional amendment banning gay marriage. She supports civil unions—but seems to be a dedicated opponent of gay marriage.

In 2009, she voted against a Republican gun-rights amendment that would allow licensed gun owners in one state to legally carry that gun in all other states—because, she said, it might set a precedent for gay marriage license reciprocity too.

Senator Bill Nelson. D-Florida

Another senator up for re-election in a crucial swing state that went for Obama in 2008, but twice** for George W. Bush (you know what the asterisks are for). Nelson, like the rest, voted to repeal DADT, and also rejected a Republican attempt to strip protections for LGBT Americans from the Violence Against Women Act. He was even honored this month as a “Champion of Equality” by SAVE Dade, a leading gay rights group in South Florida.

Nelson, however, opposes gay marriage and even supported Florida’s ban on it. He is a former chairman of the National Prayer Breakfast and speaks often of his Christian faith. He does not have a position on civil unions, as far as I can tell.

Senator Debbie Stabenow, D-Michigan

Senator, up for re-election in a (sort-of) swing state, against DADT, for protecting LGBT Americans in the Violence Against Women Act—you know the drill by now.

Stabenow is against gay marriage, however, and refuses to challenge Michigan’s ban on same-sex marriage. For some reason, rabid anti-gay marriage candidates keep running against her, which is perhaps leading her to feel boxed in—but she’s probably safe to come out for it in Michigan if she so chooses.

Representative Steny Hoyer, D-Maryland

Hoyer is the second-highest ranking Democrat in the House, and represents a state where the legislature recently passed a bill to legalize same-sex marriage. When that measure was approved, Hoyer said he believed Obama would “applaud” it—but never actually applauded it himself.

Despite a strong record on things like DADT and a very safe House seat, Hoyer has never renounced his 1996 support of the Defense of Marriage Act and has not expressly supported gay marriage. When asked this week by New York magazine whether he supported gay marriage in light of Biden’s comments, his office dodged and wouldn’t give a firm answer.

UPDATE: Hoyer announced his support for gay marriage on Thursday afternoon: “Because I believe that equal treatment is a central tenet of our nation, I believe that extending the definition of marriage to committed relationships between two people, irrespective of their sex, is the right thing to do and will not, in any way, undermine the institution of marriage so important to our society nor impose a threat to any individual marriage. It will, however, extend the respect due to every one of our fellow citizens that we would want for ourselves and our children.”

Representative Jim Clyburn, D-South Carolina

Clyburn is the third-ranking Democrat in the House and the highest-ranking black elected official in the country not named “Barack Obama,” so his support will be interesting to watch. He supported the repeal of DADT and opposed the constitutional amendments defining marriage as between a man and a woman, but also voted for the Defense of Marriage Act in 1996.

He has since skillfully avoided taking any position whatsoever on gay marriage. New York magazine hassled his office for three days this week and got no response; and Christine Johnson, the executive director of South Carolina Equality, told the magazine that her organization “was unable to find any evidence that Clyburn has ever taken a position on the issue one way or the other.” 

UPDATE: Clyburn, too, has now switched, telling MSNBC that despite growing up in a "fundamentalist Christian parsonage," he has decided that same-sex couples should be able to get married. Clyburn actually went further than Obama by saying it's not a matter that should be left up to the states. "If you consider this to be a civil right, and I do, I don't think civil rights ought to be left up to a state-by-state approach," he said.

FINAL UPDATE: This article previously contained a reference to Senator Jack Reed of Rhode Island—but late Wednesday, he changed his position too. "I've been thinking and deliberating about this for many, many months," Reed told the Providence Journal. "I believe it's appropriate to support same-sex marriage and as a result to support the Respect for Marriage Act."

House Kills Measure to Fully Fund Mortgage Fraud Task Force

With the financial sector sure to summon massive amounts of money and resources to battle any criminal or civil prosecutions over its role in the 2008 crisis, a key is how much resources authorities will have at their disposal to battle back.

When New York attorney general Eric Schneiderman appeared before the Congressional Progressive Caucus in late April, he asked the members to help him obtain funding for the Residential Mortgage-Backed Securities working group, which he co-chairs. “If you want to help me badger everybody, that’s good,” he said. “I’m a good badger by myself but I know there are some experts in this room.”

Yesterday, Representative Maxine Waters, a member of the caucus, made the first attempt to get the RMBS group funding—and it didn’t work.

She offered an amendment to a large appropriations bill, created by Republicans, that would fund, in part, the Department of Justice. The bill provided only a fraction of the $55 million the DoJ asked for in its budget request for “investigating and prosecuting financial and mortgage fraud.” Waters proposed re-appropriating some money in the bill from the NASA program to fully fund the $55 million request.

“Considering the retirement of the space shuttle program and a shift in NASA’s priorities, I believe we should use the funds in these accounts to help bring justice to defrauded investors, homeowners, and consumers,” she said on the House floor.

Representative Brad Miller also rose in support of Waters’ amendment. Though Miller was turned down for the job of executive director—because, he believes, the working group was afraid of industry blowback—Waters has been circulating a letter, signed by forty members of Congress, asking the working group to hire him anyway.

Miller strongly urged members to fully fund the RMBS investigation. “Every [Wall Street] defendant would have a defense team that would make the O.J. defense team look like a public defender, two years out of law school, handling 100 other cases,” he said. “We would be swamped by the opposition.

“But that is certainly no reason not to pursue those charges,” Miller continued. “In fact it’s all the more reason to go forward and pursue criminal fraud—to assure Americans that you…do not get a get out of jail free card because you are rich and powerful.”

Watch his comments here:

Unfortunately, when put up for a voice vote, the Waters amendment failed in the Republican-dominated chamber. Her case wasn’t helped when Representative Chaka Fattah, also a member of the progressive caucus, spoke in opposition to the amendment, citing concerns about the loss of NASA funding.

This appropriations bill will pass the House without the $55 million the administration has requested for the RMBS working group, but it doesn’t mean the money won’t come—Senate or conference appointees might still insert it. We will be sure to track the developments.

Republicans Block Debate on Student Loan Relief

The national student debt clock ticked past $1 trillion today—a fitting backdrop for a vote in the US Senate about whether to allow federal subsidized loan rates to double on July 1. Alas, Senate Republicans refused to allow debate on a bill that would keep loan rates at the current 3.4 percent, and pay for the subsidization by eliminating a sneaky tax break for wealthy Americans.

The “Stop the Student Loan Interest Rate Hike Act of 2012,” sponsored by Senate Majority Leader Harry Reid, would lock in the current rates with revenue from increased Medicare and Social Security taxes on firms with three or fewer shareholders—known as “S Corporations.” Some wealthy Americans—like say John Edwards and Newt Gingrich—create S-Corps in order to treat only a small portion of their total earnings as taxable wages, thus avoiding the Medicare and Social Security taxes.

Every Democrat in the Senate, along with independent Senators Bernie Sanders and Joe Lieberman, voted for the bill—but every Republican except three voted against it, thus keeping it from reaching the sixty-vote threshold for debate. Senator Mark Kirk, who is recovering from a stroke, did not vote, nor did Senator Richard Lugar, who is campaigning for his political life in Indiana today. Senator Olympia Snowe, who is retiring this year because she believes there’s too much partisanship, stood proudly against party politics by simply voting “present.”

The messaging by Democrats here is obvious: Republicans are hurting students and protecting the wealthy. Said Reid after the vote:

Today, Republicans voted to hit students with an additional $1,000 in debt in order to protect wealthy tax dodgers. Republicans have paid lip service to the need to protect our students from this crushing debt burden, but their obstruction speaks louder than their words. […]

Unfortunately, it appears that Republicans appear more interested in obstruction than progress. For the sake of the seven million students who are at risk of seeing their payments skyrocket, I hope Republicans’ actions will start to align more closely with their words.

Republicans profess to want to keep the student interest rates low, too, and Republicans in the House passed a bill in late April that would preserve the current rates by eliminating what they derisively call the “Obamacare slush fund,” but can more accurately be described as a preventative and public health care fund, created under health care reform, that provides $12 billion for things like medical research, diabetes prevention, modernized immunizations, tobacco cessation efforts and similar initiatives.

It’s important to note there are strong forces on the right that don’t want the rates to stay low at all—the powerful Club for Growth doesn’t think there should be any federal subsidization of student loans and that rates should instead be set by the market. Thirty Republicans in the House voted against the rate extension/slush-fund bill because of dedication to that same principle.

But the consensus in DC is that the low loan rates will be preserved, somehow. It’s simply too dangerous not to, especially in an election year. Democrats and Republicans have now offered bills to extend the rates with pay-fors they find electorally valuable—closing tax loopholes for the wealthy and rolling back part of Obamacare, respectively—but will likely find some kind of arrangement before the loan bomb detonates.

The question, really, is what else can Congress do to help indebted students? Student loan debt has already surpassed credit card debt in America and hangs over million of young people. It’s certainly noble and worthwhile to stop the subsidized loan rates from jumping, but most students also have loans beyond this category—both federal unsubsidized loans and private ones. The structural problems that create soaring tuition rates in the first place also need to be addressed.  

Schneiderman Anticipates 'Limited' Task Force Action Soon

New York Attorney General Eric Schneiderman returned to Up with Chris Hayes this weekend for the second time since President Obama named him as a co-chair to the Residential Mortgage-Backed Securities working group, the federal and state probe into Wall Street malfeasance leading up to the financial crisis.

The first time Schneiderman appeared on the program, in late January and only days after his appointment, he was bullish about the investigation’s prospects. “We’re going after the stuff that blew up the economy in our working group,” he said. “We’re going after the possibilities of tax fraud, insurance fraud, securities fraud. We’re going to look at this stuff very closely. We have the jurisdiction, we have the resources, and we have the will.”

It’s been a rough four months, however—the working group has been beset by claims that it does not have the resources and may not have the will. And this time around, Schneiderman was subtly but definitely more bearish.

In mid-April, only fifty-five staffers were assigned to the working group, which also had neither a central office nor an executive director. In late April, forty members of Congress presented Schneiderman with a letter expressing fear that “this group’s efforts may be stalled” and that “public confidence in the Working Group may be at risk.”

On yesterday’s show, Schneiderman said more people have been hired, though he didn’t provide a number—and he seemed tired of answering the question and even called it a “non-issue.”

“I think there will be announcements about staffing and offices and all this stuff that ordinarily prosecutors don’t talk much about,” Schneiderman said. “In the next week or two [we will], as transparently as we can do, at least identify numbers of folks who are working on things just to get that non-issue off the table.”

Schneiderman also telegraphed that staffing levels won’t live up to progressive demands. (CREDO is calling for 1,000 staffers, equivalent to the Savings & Loan investigation of the 1980s.) “It takes time and it takes resources, but prosecutors all over America, all the time, go up against larger numbers of lawyers and prevail. It’s very importation to understand that this is very doable,” Schneiderman said.

Schneiderman wasn’t asked about Representative Brad Miller, who told me two weeks ago that he wasn’t selected for the job because the working group was afraid of industry blowback. The forty Congressional signees of the letter to Schneiderman asked that Miller still be hired.

When he appeared on the show in January, Schneiderman said, “If we don’t have some concrete results within six, eight months I’m going to be very disappointed.” On Sunday, while still promising results, he seemed to be keeping expectations for those results low.

“The big cases that everyone is waiting for, the big platform cases about a pattern and practice of conduct, they do take a lot of time,” he warned. “But I think there will be some cases on more limited but equally important issues that get brought more quickly.”

Throughout the interview, Schneiderman asserted the working group was active and would ultimately produce results. Hayes asked Schneiderman if he would resign should he determine the working group was nothing but a “dog-and-pony show,” and he said he would—“but I have no dogs and no ponies yet, just a lot of lawyers doing work.”

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